QUESTION 1)

When it comes to measuring investments, which of the following statements is true?

1. The company may report using whichever method best aligns with their financial reporting objectives.
2. Companies are required to measure at cost/amortized cost.
3. Companies are required to measure at fair value.
4. Both cost/amortized cost and fair value are permitted in appropriate circumstances.

QUESTION 2)

When it comes to measuring investments, which of the following statements is true?

1. The company may report using whichever method best aligns with their financial reporting objectives.
2. Companies are required to measure at cost/amortized cost.
3. Companies are required to measure at fair value.
4. Both cost/amortized cost and fair value are permitted in appropriate circumstances.

QUESTION 3)

In January 2020, Haddock Ltd. had purchased an investment for $150,000. By December 31, 2020, the fair market value of that investment had increased by $20,000. Assuming this gain was included in the company's 2020 net income, which accounting method did Haddock use to account for this investment?

1. equity
2. fair value through net income (FV-NI)
3. cost
4. fair value through other comprehensive income (FV-OCI)

QUESTION 4)

Under the fair value through other comprehensive income model, unrealized gains and losses are

1. recognized in either net income or other comprehensive income.
2. ignored.
3. recognized in net income.
4. recognized in other comprehensive income.

Please help me to select the correct answers, thanks